Citigroup CEO Jane Fraser faces disgruntled employees, regulators’ demands in difficult first year

cnbc.com:

In this article

Frustration has been building within parts of Citigroup over delayed bonuses and tight budgets, two impacts of the bank's response to its regulatory oversight, according to people with direct knowledge of the situation.

Workers from junior salespeople to senior executives have been ensnared in monthslong reviews stemming from an anonymous complaint portal for employees, according to the sources. The bank freezes bonuses and performance reviews for staff under investigation, even if claims are baseless, according to the people, who asked for anonymity out of fear of reprisals.

The cumbersome internal reviews are a surprising fact of life at Citigroup, where CEO Jane Fraser has garnered headlines for talking about work-life balance and other ways to get a recruiting edge versus competitors. They illustrate how regulatory scrutiny has weighed on employee morale, making the already-difficult task of turning around Citigroup even harder as Fraser, 54, approaches her one-year anniversary leading the firm.

Fraser, the first female chief of a major U.S. bank, finds herself in a tricky balancing act: To overhaul a company that has deeply underperformed U.S. rivals for years, she has to improve returns and grow businesses while keeping a lid on expenses and plowing money into appeasing regulators.

Investors have been skeptical so far. While 2021 was the best year for the banking industry in more than two decades because of rising interest rates, Citigroup didn't participate in the rally. Since Fraser took over in March 2021, the bank's stock has climbed 2.7%, while Bank of America jumped 38% and Wells Fargo, also a turnaround project, jumped 56% in that period.

Fraser, a former McKinsey partner who took over after